Central Garden & Pet sees 6% increase in first quarter sales
Pet segment up 8%
Central Garden & Pet Company reported first quarter net sales of $307.3 million, an increase of 6%, compared with $290.5 million in the first quarter of the prior year.
"We are beginning to see signs of progress from our efforts to improve our business and better utilize our resources," said John Ranelli, president and CEO of Central Garden & Pet. "As a result of these efforts, our operations are becoming more efficient and we are executing better."
First quarter net sales for the pet segment increased $14.7 million, or 8%, from the same period a year ago to $199.3 million, due in large part to higher sales of other manufacturers' products as well as higher flea and tick and professional revenues. Sales of other manufacturers' products increased primarily due to higher dog food and treat sales. Professional revenues benefited from a shift in timing of sales. The pet segment's branded product sales were $146.7 million in the first quarter of 2015 and sales of other manufacturers' products were $52.6 million.
The pet segment's operating income was $20.6 million compared with $14.4 million in the first quarter of 2014. The $6.2 million increase in operating income was largely due to increased sales and improved gross margins. The Pet segment's operating margin increased 250 basis points, benefitting predominately from higher gross margins across most of the pet categories. The professional and flea and tick businesses were the largest contributors to the operating margin increase, reflecting a shift in mix toward higher-margin products. The pet nutrition and aquatics businesses experienced lower profitability during the quarter.
Overall, the company’s gross margin of 28.6% increased 120 basis points compared to the prior year as a result of strength in the pet segment. The company's first quarter operating income was $1.1 million, compared with an operating loss of $8.4 million in the first quarter of 2014, an improvement of $9.5 million. Operating margin of 0.4% rose 320 basis points from the prior year period. Increased profitability in the pet and garden segments contributed to the operating income and operating margin improvement. The net loss for the quarter was $5.7 million, or $0.12 per fully diluted share, compared to a net loss of $12.7 million, or $0.26 per fully diluted share in the year-ago period.